Monday, 16 January 2017

Trading freely

The UK Government’s approach to Brexit is at last slowly being spelled out.  The objective is for the UK to once again take its rightful place ruling the waves at the heart of the world’s trade network, in free trade arrangements with all countries across the whole globe and being subject only to rules made in the sovereign parliament of these islands, and not to any other jurisdiction, especially if there are any foreigners involved. 
The strategy for achieving this is firstly to remove the UK from the world’s largest and most successful free trade area sitting on our doorstep, with which we conduct around half our trade, and subsequently negotiate free trade arrangements on a bilateral basis with a host of other countries further away. 
It’s certainly an ‘interesting’ approach, but it’s being driven by an absolute determination to do something called ‘controlling our borders’ which apparently means that foreigners will not be allowed in, unless they’re doctors, nurses, bankers, plumbers, builders, fruit pickers, or in any other way essential for the UK economy.  But ‘we’ will have control.  Honest.
In other news, the minister for exiting the EU, David Davis, writing in the Sunday Times, has said that “It is absolutely in our interest that the EU succeeds”.  It turns out that the EU is a damned fine idea after all for those European chappies; just not for we British.  And we don’t want it to fail at all. 
It’s funny though – I must have imagined all those stories before and since the referendum when the Brexiteers told us that the EU was a failing project which was going to fall apart anyway, let alone those stories which had Brexiteers rubbing their hands with glee at the thought that other countries would follow the UK’s example and hold their own exit referendums.  Like this one for instance by someone called David Davis who described the EU as “a crumbling relic from a gloomy past”.  I wonder what became of him?

Friday, 13 January 2017

Borrowing from Peter to pay Paul

We can’t go on borrowing indefinitely, according to the Labour-Tory austerity mantra, and we need to reduce the national debt.  One of the ways in which that is to be achieved is by getting private companies, or other countries, to fund infrastructure projects, because, of course, they have the money sitting in their piggy banks and don’t need to depend on borrowing.  Or do they?
I’m far from being a fan of the Wylfa Newydd project in any event, but I noticed recently that there’s something curious about the way in which it’s being funded, when compared with the mantra referred to above.  According to press reports, up to £12 billion of the construction cost will be funded by the Japanese government.  So where, exactly, will the Japanese government find such a sum of money?
According to this list, the country with the largest public debt as a percentage of GDP is … Japan.  (The link shows several different ways of assessing the level of debt – I’ve used the column showing the average of CIA and IMF data.  Using one of the measures, the first and second positions of Japan and Greece are reversed, but the basic point still holds.)  So a country which has a debt ratio of 90% of GDP (the UK) cannot afford to borrow more to fund its infrastructure development, but it will instead rely on another country whose ratio is 174% (Japan) to fund that development.  By borrowing the money, of course.
Borrowing is fine, apparently, as long as someone else is doing it.  It only brings about the end of civilisation as we know it when the UK borrows money.  And that brings me back to a common theme on this blog – the decision as to whether a government should borrow or not owes more to ideology than to economics.

Thursday, 12 January 2017

Progressive access to privileges

I’m not sure that anyone knows any more what Labour’s position is as a party on immigration and freedom of movement.  It’s one of the few things on which Corbyn has actually been fairly clear and consistent; his argument that treating it as a numbers game is a silly approach is one with which I concur.  I also agree with him that tackling the way in which unscrupulous employers exploit migrants, and find ways of paying them less than the minimum wage would be likely to reduce immigration numbers in itself.  (Although I disagree with his apparent belief that controlling numbers of immigrants is a reason for doing that – I think ending exploitation is a sufficient justification in itself.)
But he’s regularly being undermined by Labour MPs who are so afraid of losing votes and seats that they are using UKIP language and policies themselves.  And as we’ve seen this week, some are desperately keen to ‘bounce’ him into changing his position.  In the process, of course, they strengthen the narrative that immigration ‘needs’ to be controlled.  But what has struck me is the extent to which Corbyn’s almost honourable stance on the issue has been described as vague and unclear, because he refuses to say what he will do to reduce immigration as a result of rejecting the whole premise of the question. 
It’s a classic example of the Overton window in operation, and the media – including the so-called impartial BBC – are restricting debate to a narrow band rather than accepting that there are opinions which lie outside it.  So, as far as those questioning Corbyn are concerned, immigration is a problem, it needs to be reduced and because he won’t say how or by how many he will reduce it, he’s being vague or evasive.  It isn’t that Corbyn hasn’t tried very hard to be clear and consistent; it’s rather that his views don’t fall within the narrow window in which debate is currently ‘allowed’ to take place. 
I’m sure that the UKIP/Tory/Labour mainstream/media consensus is more than happy to exclude any views which don’t fit their own preconceptions, but it doesn’t make for a debate in which the question is properly and rationally considered.  If only those who agree that immigration is a problem are to be given any credibility, no real alternatives will ever be heard.  And that, in turn, strengthens the boundaries of the window.  No surprise that immigration ends up being seen as a ‘problem’ even where in those areas where there is none.
Sticking with the Labour Party and immigration, I was well and truly gobsmacked listening to Kinnock Junior pontificating on the matter on the BBC on Tuesday.  He sat there, as a representative of the Labour Party – the self-proclaimed party of working people - arguing for a two-tier approach to the issue under which the high-paid would have complete freedom of movement whilst the lower orders would be subject to restrictions and quotas.  When Nye Bevan said that nothing was too good for the working class, he didn’t add a list of exceptions, or talk about a two-tier system of access to privileges; but his successors clearly believe that there are some things to which mere oiks should not aspire.  Still, it’s a timely reminder to those who keep banging on about a ‘progressive’ alliance of just what ‘progressive’ means to the twenty-first century Labour Party.

Wednesday, 11 January 2017

Overseas aid isn't the problem

The UK has a relatively large budget for foreign aid compared to other countries (although still not large enough), and it should surprise no-one that not all of it is particularly well-spent.  Last week’s story about an Ethiopian girl band allegedly receiving a sum of £5.2 million for their “branded media platform” was a case in point.  I’m not sure that we’ve been given all the details here, but even taking the story at face value, it does little more than underline the fact that any detailed analysis of how money is spent would throw up apparently unjustifiable examples. 
Part of the problem with the aid budget is that those running aid programmes have a strange desire to receive proper credit for the aid given – they prefer to give the money to something on which they can then stick a Union Jack so that people know where the money has come from.  And if there’s a photo-op for a politician as well, then all the better.  A girl band ticks the right boxes.  It’s not dissimilar to the Welsh Government’s approach to projects which it funds – they have the same preference for projects which can be badged and used for ministerial PR.  The result, in both cases, can be that the visibility of the expenditure is more important to the politicians than ensuring that the money goes where it’s most needed.
But accepting that the aid is not always being spent in the best or most effective way is an argument for better control and targeting, not for a reduction in the amount being spent.  The fact that a girl band may not need £5.2 million doesn’t mean that people in Ethiopia don’t need that £5.2 million.  And it certainly isn’t any sort of excuse for the argument being put forward by some of those drawing attention to this sort of spending that we need the money more in the UK.
In this specific case, we had some Tory MPs arguing that the money should instead be spent on “funding adult social care in the UK”.  It’s an utterly false choice.  It isn’t just Tory MPs, of course – how often have we all heard the line about ‘charity starts at home’, or ‘why are we sending money abroad when there’s so much poverty at home?’.  Just scan the letters columns of any daily newspaper over a period.  But is inadequate funding for adult social care really the direct result of the way the UK spends its foreign aid budget?
At its basest, this attitude is based on an assumption that we can’t tackle poverty in the UK (or fund mental health or social care - insert here any pet project of your choice) because we’re spending our money on foreign aid instead.  And the ‘conclusion’ which is drawn from that is that the way to help the poor is by taking aid away from the even poorer.  There is a massive level of inequality in the UK but, according to this view of the world, what keeps people in their current state isn’t that the richest in our society are accumulating an ever greater share of total wealth, it is that a tiny proportion (0.7%) of UK GDP is spent on overseas aid, and an even tinier proportion of that might be being misspent.  And of course it has nothing to do with decisions to spend money on other things within the UK (such as a new laser weapon system, with a price tag of £30 million – it makes that £5.2 million look like a very wise investment).  One has only to put it in those terms to see the complete fallacy of the argument.
So how do they get away with it?  Why is it that people are so ready to believe that the problem isn’t with the richest siphoning off the country’s wealth, but with the attempt to provide a minimum of assistance to the world’s poorest?  Perhaps we should start by asking ourselves who controls the content and direction of public debate - and whose interests are served by convincing the poor that the problem is the even poorer.

Tuesday, 10 January 2017

Choosing the right scenario

The headline in yesterday’s Western Mail was about a report from a think tank claiming that there is little to fear from a so-called ‘hard’ Brexit.  It reminded me of two thirds of the oath required before giving evidence in a court – it looks like the truth, and nothing but the truth, but not exactly the whole truth.
On the basis of an assessment of the likely impact of tariffs in the event of no deal on free trade, the report concludes that the Treasury will actually collect more than it will have to pay out – some £12.7 billion compared to £8.8 billion.  I haven’t gone through the detail of the calculation, but I see no obvious reason to dispute the figures.  The problem that I do see with them, though, is that they assume that we continue to buy and sell the same products and services to and from the EU27, and apply the likely tariffs to that trade.
In reality, exiting the single market is likely to change the nature of the trade between the UK and the EU27, and to do so significantly.  Whether it does so in ways which are damaging to the UK economy or in ways which benefit the UK economy is harder to judge.  I tend to suspect the former is more likely in the short to medium term, but I accept that the effects may be mitigated in the longer term by trade with other countries outside the EU if the more optimistic projections of the Brexiteers are to be believed.  (If they were honest, they could legitimately describe it as a gamble on short term pain for the possibility of long term gain; but instead they’ve been relentlessly and unrealistically optimistic and dishonest in trying to pretend that everyone will gain immediately, rather than accepting that there are going to be some losers, in the short term at least.)
There are a number of reasons why I tend to believe that the former scenario is more likely.  One of them, just as an example, is EU rules on tendering for work.  Under those rules, for contracts of a specified size, public sector purchasers are obliged to give fair and equal consideration to any tenders received from anywhere within the single market.  It’s part of what makes it a single market.  However, there is no such obligation for tenders received from a country outside the single market, with such tenders subject to additional tariffs as well.  That does not, of course, mean that UK companies cannot or would not tender for such contracts, but it does raise a question about the likelihood of success for such tenders.  And, in the same way, it might well mean that UK-based tenderers win more contracts in the UK if EU competitors’ bids are subject to tariffs.  On the basis of that, and other, factors, it is surely valid at least to question the assumption that the pattern of trade would remain unaltered.
The report also suggests other ways in which the UK could take action to mitigate the impact, once it is free of EU rules.  One of those is that: “Freed from the EU rules on state aid, the UK will be able to operate a more extensive regional aid programme.”  Again, that’s entirely true, and the argument was a regular feature of the Brexit campaign.  The problem, though, is that there is a not insignificant difference between “will be able to operate” and the much shorter “will operate”
Of course, it’s not down to the think tank to set UK policy in this area, they can only suggest.  But given the history of UK regional policy, I’m far from being alone in my scepticism as to whether any conceivable UK Government would actually implement such an approach.  And they do have, as ‘cover’ as it were, the fact that in rejecting the EU, the UK (and Welsh) electorate have implicitly rejected the concept that richer parts of the union should contribute to the development of the poorer parts.  Isn’t that a major part of that elusive £350 million per week that ‘we’ (i.e. the UK Treasury) were allegedly going to get back?
So, the report gives one view on the results of Brexit, but it is just that, one view.  As the Western Mail’s reporting demonstrated (by quoting a Welsh government spokesperson and Andrew RT Davies), its findings will be rejected by those who believe that full access to the market is the best outcome, and revered by those who are looking for some level of backing for their belief that the EU has more to lose than the UK does, who, despite Gove’s infamous comment, are quite happy to quote any ‘expert’ who will give them the answer that they want to hear.

Monday, 9 January 2017

Serving whose interests?

Our First Minister seems to have had a nice little jaunt to Norway to see how they cope with being outside the EU but inside the Single Market.  A small oil-rich country on the fringes of the EU sounds almost similar to Wales – apart from the ‘oil-rich’ bit, which is pretty central to Norway’s economic success and is economically more important than any apparent similarities.  Oh, and the bulk of their exports to the EU consist of oil and gas delivered through pipelines rather than goods which need to be physically checked to ascertain their true origin.  Whatever, the basic model of being in the Single Market but outside the EU is certainly one deserving of some consideration, even if not immediately obviously relevant to Wales.
The response of the Tories’ leader in Wales was entirely predictable: Norway might be interesting, but what we need to concentrate on is a uniquely British solution, a unique relationship with the other EU countries of a type which no-one else enjoys.  The implication is clearly that it will be not only unique, but ‘better’ - after all, if an existing model was considered good enough, it would be a lot quicker and simpler to replicate that than to create an entirely new model.  It might even be achievable within the fabled two year timetable.
The other 27 will give the UK that unique and better deal, because …?  Well, because they’re all foreigners and the UK is unique and special.  Obviously.  And of course, countries such as Norway which have already negotiated deals will be more than happy for the UK to come along and get a better deal, because …?  Well, because they’re foreigners, not special and unique like the British, and they know their place.  Again, obviously.
I was disappointed, but not surprised, at the First Minister’s reference to retaining freedom of movement, but only to go to a pre-identified job.  (And sadly, Plaid has been making very similar noises.)  It’s as though they see freedom of movement as something which applies only to other people, forgetting – or more likely deliberately ignoring – the probable reciprocity of any such arrangement.  But in the real world constraints on ‘them’ coming ‘here’ also mean that the same constraints will apply to ‘us’ going ‘there’. 
So, in effect, politicians talking about limiting freedom of movement, in the case of nationals of other EU states, to those who have jobs to come to are also telling us that our own freedom of movement should be limited to that which primarily serves the interests of capital and employers rather than being considered as a right of ordinary people.  Yet still they claim to be ‘internationalists’, ‘socialists’, and ‘progressives’.  Their definitions of those words seem to owe more to Orwell than to Marx.

Friday, 6 January 2017

Is it me?

President-elect Trump’s threats to Mexico and Canada – the only two countries with which the US shares a land border – that he will scrap the free trade agreements and impose heavy import duties is entirely consistent with the line he was taking throughout the election campaign.  His protectionist, America First viewpoint has been clearly stated.  Trade agreements will only be honoured – let alone negotiated – if they serve the interests of the USA at the expense of other parties.  He’s left little room for doubt over his approach. 
What I don’t understand is why so many Brexiteers are blithely assuming that he’ll be desperately keen to negotiate a free trade agreement with a country thousands of miles away when he’s planning to tear up such agreements with close neighbours.
Am I missing something?

Thursday, 5 January 2017

Let's just appoint a few flat-earthers

I’m not sure that the now former UK Ambassador to the EU is as entirely blameless as some have painted him: the route by which his advice to the Government about the length of time it would take to negotiate Brexit (as well as his subsequent resignation e-mail) reached the media has yet to be fully explained.  It’s entirely proper for diplomats to provide their best and most honest advice to governments; it’s rather less normal to make that advice public.
But there is another norm here as well - it has long been accepted (perhaps it’s one of those strange ‘British values’ that they keep telling us about) that senior civil servants are appointed for their ability to represent the government of the day impartially, and not on the basis of their political views.  I’ve noted before that I can see an argument for taking a different approach to the appointment of ambassadors, where an ability to represent accurately and sincerely the views of the government of the day is an important attribute.  If the Brexiteers were to start making that argument in a general sense, then I’d have some sympathy with their viewpoint. 
They’re not doing that, though; they are selecting one particular job and demanding that the person appointed must share their simplistic world view.  I suppose that dealing with matters on a case-by-case basis rather than developing a general policy is standard UK practice, but it doesn’t make for consistency or clarity.  And given the nature of the demands being expressed by some, it doesn’t make for getting the best people into the jobs either. 
John Redwood – ah, there’s a name that brings back memories – argued yesterday (just before the new appointee was named) that the new ambassador should be someone who thinks that Brexit is ‘straightforward’.  Now, there do seem to be a lot of those to choose from, but given the complexities already identified, I wouldn’t want to put anyone with such a simplistic viewpoint anywhere near the negotiations, purely on the pragmatic basis that they’re unlikely to understand most of what’s being discussed.
The Brexiteers’ approach to negotiation seems to be falling increasingly into the traditional British way of dealing with foreigners – speak to them slowly and loudly until they do what we want.  The strange thing, to me, is that they seriously seem to believe that it will work.

Wednesday, 4 January 2017

One small word

Given the extent to which the same words can be interpreted to mean entirely different things, the success with which humans communicate is often amazing.  Take the word ‘can’, for instance.  This week, the question was asked as to whether Labour ‘can’ win the next UK general election.  It produced different answers from different people, but it seems to me that they’re actually based on rather different interpretations of the question.
On the one hand, those who argue that, ‘of course Labour can win’, are responding to a very literal definition of the word ‘can’.  And based on that literal definition, I agree with them.  Given the right conditions, the right campaign, at least a display of unity, and enough Brexit chaos in Tory ranks, it is certainly a possibility that Labour 'can' win a majority in 2020.
But I don’t think that was quite the question that the Fabian Society was asking in its report.  I think that they were looking less at an outcome based on getting a whole series of hypothetical ducks in a row, and more at the probability of getting from where things are now to a particular outcome in 3 years’ time.  And, for what it’s worth, I tend to support their conclusion that the probability is close to zero.
However, that clear difference in interpretation and understanding of the question is one of the reasons why the party will do nothing to avert the result being foreseen by the Fabian Society’s report.  As long as a sufficient number of them believe that they can win, their ‘strategy’ (and I use the term loosely here) will be to carry on regardless.  It isn’t the only reason for their rejection of electoral alliances, though.
It’s easy to see the potential advantages, to any party, of an electoral alliance where opponents stand aside and give that party a clear run (although I personally remain highly sceptical of the extent to which supporters of one party can be depended upon to vote for another party just because the leadership tells them to do so).  What’s rather less clear is the advantage to the party standing aside under any such deal.
I don’t think that the maths work terribly well either.  There are some seats in which the Lib Dems might be the front-runner in any challenge to the Tories, but there are no seats, anywhere in the UK, where it would make sense for Labour to stand aside for the Green Party for instance.  And In Wales, there are no Tory-held seats where Plaid is the front-runner amongst the opposition.  So the sort of deal being discussed is one in which Labour would actually only need to stand aside in a few Tory seats where the Lib Dems are the challengers, whereas the Green Party, Plaid, and the Lib Dems would be expected to stand aside in large numbers of seats in favour of Labour. 
Not surprisingly for a report emanating from within the Labour Party, such a scenario is overwhelmingly favourable to Labour – improving their chances of taking seats from the Tories at the expense of standing aside in a few seats where they wouldn’t expect to win anyway.  And still they line up to reject it.
And that brings me back to the point here.  What is being floated is an electoral alliance which owes more to a negative view of the Tories than a positive vision for a different future.  Labour’s only currency is that they aren’t the Tories; many of their policies aren’t actually that different.  A Labour government would still renew Trident, to select just one example, even if it were elected with the support of anti-Trident parties – they know that they’d be able to rely on their true friends in the Tory party to get that through Parliament.  As a voter, I couldn’t vote for such an alliance purely to replace one party with another – I need a better reason.
There is one reason – and only one reason – that I can think of which would lead me to support a cross-party electoral alliance for one single election, and that is electoral reform.  Ending the way in which one party (currently the Tories) can exercise absolute power on the basis of minority support is a prize worth paying a price for in the short term.  I don’t think it’s going to happen, though.  As long as the two main parties continue to believe that they ‘can’ (back to that word again) win an outright majority under the present system, they will not support change.  Absolute power is their whole rationale.  And that, ultimately, is the significance of their rejection of the report from the Fabians.

Tuesday, 3 January 2017

Devoid of meaning

I could understand, up to a point, that the shock of suddenly finding herself resident in 10 Downing Street led the new Prime Minister to come out with a few meaningless phrases, such as the now infamous “Brexit means Brexit”.  There was no obvious reason why she should have been any more prepared for the wholly unexpected result than anyone else, and yet she was expected to say something.  Buying time by saying nothing much was an obvious option; but vacuity can only carry someone so far - the point arrives when something a bit more substantial is required.
Perhaps the extent to which that initial three word sentence has been repeated has led her to believe that being vacuous ‘works’ in some sense, because it has been followed by equally silly statements such as the one about a “red, white and blue Brexit”.  She may even think that she’s being gnomic, but sooner or later surely she must be challenged much harder about what the words she uses actually mean – if they have any meaning at all.
I can also understand her trying to call for unity in her New Year message – but that isn’t quite what she did.  Instead, she claimed that we are all already united, in a fashion which assumes that those of us who think that a wrong decision has been taken have already accepted defeat and are becoming enthusiastic proponents of that which we previously opposed.  It’s clearly at odds with the facts – but then, people like her no longer seem to worry about mere facts.
She claimed that she will be “there to get the right deal not just for those who voted to leave, but for every single person in this country”.  That works as a sound bite, and even sounds very noble, but it’s not only meaningless in practice, it’s an impossible thing to achieve.  The very nature of the change in front of us is that there will be winners and losers – that is an inevitable consequence of change.  If she’d referred to the majority, it might just have been credible, but ‘every single person’?  No chance – it’s as meaningless a phrase as much of the rest of what she has said so far.
On the other hand, perhaps she’ll get away with it; meaninglessness seems to be the new meaning.